A World Overwhelmed By Western Hypocrisy

By Paul Craig Roberts

June 29, 2011 "Information Clearing House" -- -- -- - Western institutions have become caricatures of hypocrisy.

The International Monetary Fund and the European Central Bank are violating their charters in order to bail out French, German, and Dutch private banks. The IMF is only empowered to make balance of payments loans, but is lending to the Greek government for prohibited budgetary reasons in order that the Greek government can pay the banks. The ECB is prohibited from bailing out member country governments, but is doing so anyway in order that the banks can be paid. The German parliament approved the bailout, which violates provisions of the European Treaty and Germany’s own Basic Law. The case is in the German Constitutional Court, a fact unreported in the US media.

US president George W. Bush appointed an immigrant, who is not impressed with the US Constitution and the separation of powers, to the Justice (sic) Department in order to get a ruling that the president has “unitary powers” that elevate him above statutory US law, treaties, and international law. According to this immigrant’s legal decisions, the “unitary executive” can violate with impunity the Foreign Intelligence Surveillance Act, which prevents spying on Americans without warrants obtained from the FISA Court. The immigrant also ruled that Bush could violate with impunity the statutory US laws against torture as well as the Geneva Conventions. In other words, the fictional “unitary powers” make the president into a Caesar.

Constitutional protections, such as habeas corpus, which prohibit government from holding people indefinitely without presenting charges and evidence to a court, and which prohibit government from denying detained people due process of law and access to an attorney, were thrown out the window by the US Department of Justice (sic), and the federal courts went along with most of it.

As did Congress, “the people’s representatives”. Congress even enacted the Military Tribunals Commissions Act of 2006, signed by the White House Brownshirt on October 17.

This act allows anyone alleged to be an “unlawful enemy combatant” to be sentenced to death on the basis of secret and hearsay evidence not presented in the kangaroo military court placed out of reach of US federal courts. The crazed nazis in Congress who supported this total destruction of Anglo-American law masqueraded as “patriots in the war against terrorism.”

The act designates anyone accused by the US, without evidence being presented, as being part of the Taliban, al-Qaeda, or “associated forces” to be an “unlawful enemy combatant,” which strips the person of the protection of law. Not even George Orwell could have conceived of such a formulation.

The Taliban consists of indigenous Afghan peoples, who, prior to the US military intervention, were fighting to unify the country. The Taliban are Islamist, and the US government fears another Islamist government, like the one in Iran that was blowback from US intervention in Iran’s internal affairs. The “freedom and democracy” Americans overthrew an elected Iranian leader and imposed a tyrant. American-Iranian relations have never recovered from the tyranny that Washington imposed on Iranians.

Washington is opposed to any government whose leaders cannot be purchased to perform as Washington’s puppets. This is why George W. Bush’s regime invaded Afghanistan, why Washington overthrew Saddam Hussein, and why Washington wants to overthrow Libya, Syria, and Iran.

America’s First Black (or half white) President inherited the Afghan war, which has lasted longer than World War II with no victory in sight. Instead of keeping with his election promises and ending the fruitless war, Obama intensified it with a “surge,”

The war is now ten years old, and the Taliban control more of the country than does the US and its NATO puppets. Frustrated by their failure, the Americans and their NATO puppets increasingly murder women, children, village elders, Afghan police, and aid workers.

A video taken by a US helicopter gunship, leaked to Wikileaks and released, shows American forces, as if they were playing video games, slaughtering civilians, including camera men for a prominent news service, as they are walking down a peaceful street. A father with small children, who stopped to help the dying victims of American soldiers’ fun and games, was also blown away, as were his children. The American voices on the video blame the children’s demise on the father for bringing kids into a “war zone.” It was no war zone, just a quiet city street with civilians walking along.

The video documents American crimes against humanity as powerfully as any evidence used against the Nazis in the aftermath of World War II at the Nuremberg Trials.

Perhaps the height of lawlessness was attained when the Obama regime announced that it had a list of American citizens who would be assassinated without due process of law.

One would think that if law any longer had any meaning in Western civilization, George W. Bush, Dick Cheney, indeed, the entire Bush/Cheney regime, as well as Tony Blair and Bush’s other co-conspirators, would be standing before the International Criminal Court.

Yet it is Gadaffi for whom the International Criminal Court has issued arrest warrants. Western powers are using the International Criminal Court, which is supposed to serve justice, for self-interested reasons that are unjust.

What is Gadaffi’s crime? His crime is that he is attempting to prevent Libya from being overthrown by a US-supported, and perhaps organized, armed uprising in Eastern Libya that is being used to evict China from its oil investments in Eastern Libya.

Libya is the first armed revolt in the so-called “Arab Spring.” Reports have made it clear that there is nothing “democratic” about the revolt.
The West managed to push a “no-fly” resolution through its puppet organization, the United Nations. The resolution was limited to neutralizing Gadaffi’s air force. However, Washington, and its French puppet, Sarkozy, quickly made an “expansive interpretation” of the UN resolution and turned it into authorization to become directly involved in the war.

Gadaffi has resisted the armed rebellion against the state of Libya, which is the normal response of a government to rebellion. The US would respond the same as would the UK and France. But by trying to prevent the overthrow of his country and his country from becoming another American puppet state, Gadaffi has been indicted. The International Criminal Court knows that it cannot indict the real perpetrators of crimes against humanity--Bush, Blair, Obama, and Sarkozy--but the court needs cases and accepts the victims that the West succeeds in demonizing.

In our post-Orwellian times, everyone who resists or even criticizes the US is a criminal. For example, Washington considers Julian Assange and Bradley Manning to be criminals, because they made information available that exposed crimes committed by the US government. Anyone who even disagrees with Washington, is considered to be a “threat,” and Obama can have such “threats” assassinated or arrested as a “terrorist suspect” or as someone “providing aid and comfort to terrorists.” American conservatives and liberals, who once supported the US Constitution, are all in favor of shredding the Constitution in the interest of being “safe from terrorists.” They even accept such intrusions as porno-scans and sexual groping in order to be “safe” on air flights.

The collapse of law is across the board. The Supreme Court decided that it is “free speech” for America to be ruled by corporations, not by law and certainly not by the people. On June 27, the US Supreme Court advanced the fascist state that the “conservative” court is creating with the ruling that Arizona cannot publicly fund election candidates in order to level the playing field currently unbalanced by corporate money. The “conservative” US Supreme Court considers public funding of candidates to be unconstitutional, but not the “free speech” funding by business interests who purchase the government in order to rule the country. The US Supreme Court has become a corporate functionary and legitimizes rule by corporations. Mussolini called this rule, imposed on Americans by the US Supreme Court, fascism.

The Supreme Court also ruled on June 27 that California violated the US Constitution by banning the sale of violent video games to kids, despite evidence that the violent games trained the young to violent behavior. It is fine with the Supreme Court for soldiers, whose lives are on the line, to be prohibited under penalty of law from drinking beer before they are 21, but the idiot Court supports inculcating kids to be murderers, as long as it is in the interest of corporate profits, in the name of “free speech.”

Amazing, isn’t it, that a court so concerned with ‘free speech” has not protected American war protesters from unconstitutional searches and arrests, or protected protesters from being attacked by police or herded into fenced-in areas distant from the object of protest.

As the second decade of the 21st century opens, those who oppose US hegemony and the evil that emanates from Washington risk being declared to be “terrorists.” If they are American citizens, they can be assassinated. If they are foreign leaders, their country can be invaded. When captured, they can be executed, like Saddam Hussein, or sent off to the ICC, like the hapless Serbs, who tried to defend their country from being dismantled by the Americans.

And the American sheeple think that they have “freedom and democracy.”

Washington relies on fear to coverup its crimes. A majority of Americans now fear and hate Muslims, peoples about whom Americans know nothing but the racist propaganda which encourages Americans to believe that Muslims are hiding under their beds in order to murder them in their sleep.

The neoconservatives, of course, are the purveyors of fear. The more fearful the sheeple, the more they seek safety in the neocon police state and the more they overlook Washington’s crimes of aggression against Muslims.

Safety uber alles. That has become the motto of a once free and independent American people, who once were admired but today are despised.

In America lawlessness is now complete. Women can have abortions, but if they have stillbirths, they are arrested for murder.

Americans are such a terrified and abused people that a 95-year old woman dying from leukemia traveling to a last reunion with family members was forced to remove her adult diaper in order to clear airport security. http://www.nwfdailynews.com/news/mother-41324-search-adult.html Only a population totally cowed would permit such abuses of human dignity.

In a June 27 interview on National Public Radio, Ban Ki-moon, Washington’s South Korean puppet installed as the Secretary General of the United Nations, was unable to answer why the UN and the US tolerate the slaughter of unarmed civilians in Bahrain, but support the International Criminal Court’s indictment of Gadaffi for defending Libya against armed rebellion. Gadaffi has killed far fewer people than the US, UK, or the Saudis in Bahrain. Indeed, NATO and the Americans have killed more Libyans than has Gadaffi. The difference is that the US has a naval base in Bahrain, but not in Libya.

There is nothing left of the American character. Only a people who have lost their soul could tolerate the evil that emanates from Washington.

Webster Tarpley on how the Bankers Plan to use Greece as an Example.

Tarpley Says:

--Prime Minister Popandreau must go.
--The 26 billion Euro's of Greek Spending Cuts planned are immoral.
--The 50 billion Euro's that bankers have sited represent a radical criminal privatization, an IMF extortion of private property. It is robbery, theft and extortion.
--Greeks must vote against this new brutal Austerity. The debt cannot be paid.
--Greeks must Negotiate Immediate Unconditional Debt Moratorium.

Libya all about oil, or central banking?

Editor's NOTE:

For more information on this topic, please listen to the excellent interview that Jim Fetzer did with Adrian Salbuchi of Argentina on Fetzer's The Real Deal radio program. You will find it to be extremely enlightening.

--Dr. J. P. Hubert

By: Ellen Brown
Asia Times Online
April 14, 2011

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal:

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

Alex Newman wrote in the New American:

In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the "[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi."

Newman quoted CNBC senior editor John Carney, who asked,

"Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era."

Another anomaly involves the official justification for taking up arms against Libya. Supposedly it's about human rights violations, but the evidence is contradictory. According to an article on the Fox News website on February 28:

As the United Nations works feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down on protesters, the body's Human Rights Council is poised to adopt a report chock-full of praise for Libya's human rights record.

The review commends Libya for improving educational opportunities, for making human rights a "priority" and for bettering its "constitutional" framework. Several countries, including Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give Libya positive marks for the legal protections afforded to its citizens - who are now revolting against the regime and facing bloody reprisal.

Whatever might be said of Gaddafi's personal crimes, the Libyan people seem to be thriving. A delegation of medical professionals from Russia, Ukraine and Belarus wrote in an appeal to Russian President Dmitry Medvedev and Prime Minister Vladimir Putin that after becoming acquainted with Libyan life, it was their view that in few nations did people live in such comfort:

[Libyans] are entitled to free treatment, and their hospitals provide the best in the world of medical equipment. Education in Libya is free, capable young people have the opportunity to study abroad at government expense. When marrying, young couples receive 60,000 Libyan dinars (about 50,000 US dollars) of financial assistance. Non-interest state loans, and as practice shows, undated. Due to government subsidies the price of cars is much lower than in Europe, and they are affordable for every family. Gasoline and bread cost a penny, no taxes for those who are engaged in agriculture. The Libyan people are quiet and peaceful, are not inclined to drink, and are very religious.

They maintained that the international community had been misinformed about the struggle against the regime. "Tell us," they said, "who would not like such a regime?"

Even if that is just propaganda, there is no denying at least one very popular achievement of the Libyan government: it brought water to the desert by building the largest and most expensive irrigation project in history, the US $33 billion GMMR (Great Man-Made River) project. Even more than oil, water is crucial to life in Libya.

The GMMR provides 70% of the population with water for drinking and irrigation, pumping it from Libya's vast underground Nubian Sandstone Aquifer System in the south to populated coastal areas 4,000 kilometers to the north. The Libyan government has done at least some things right.

Another explanation for the assault on Libya is that it is "all about oil", but that theory too is problematic. As noted in the National Journal, the country produces only about 2% of the world's oil. Saudi Arabia alone has enough spare capacity to make up for any lost production if Libyan oil were to disappear from the market. And if it's all about oil, why the rush to set up a new central bank?

Another provocative bit of data circulating on the Net is a 2007 "Democracy Now" interview of US General Wesley Clark (Ret). In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. "I don't know!" was the response. "I guess they don't know what else to do!" Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland.

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that "[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar."

According to a Russian article titled "Bombing of Libya - Punishment for Ghaddafi for His Attempt to Refuse US Dollar", Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.

During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.

And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned ... Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.


Libya not only has oil. According to the International Monetary Fund (IMF), its central bank has nearly 144 tonnes of gold in its vaults. With that sort of asset base, who needs the BIS, the IMF and their rules?

All of which prompts a closer look at the BIS rules and their effect on local economies. An article on the BIS website states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability".

They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.

In a 2002 article in Asia Times Online titled "The BIS vs national banks" Henry Liu maintained:

BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The BIS does to national banking systems what the IMF has done to national monetary regimes. National economies under financial globalization no longer serve national interests.

... FDI [foreign direct investment] denominated in foreign currencies, mostly dollars, has condemned many national economies into unbalanced development toward export, merely to make dollar-denominated interest payments to FDI, with little net benefit to the domestic economies.

He added, "Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation." The "state theory of money" refers to money created by governments rather than private banks.

The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest-free.

Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.

And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans". Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.

That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the Great Man-Made River project. Libyans are worried that North Atlantic Treaty Organization-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.

So is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible. (editor's bold emphasis throughout)

Most countries don't have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation's own publicly owned bank. Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans.

If the Gaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors, and whether education and healthcare continue to be free.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://webofdebt.com and http://ellenbrown.com/.

Coup d’état - The Historical Framework of Globalization

Editor's NOTE:

I am largely in agreement with Dr. Polk except for his assertion that a coup d’état occured in 1913. It is certainly true that the creation of the Federal Reserve system served as a major impetus in the conversion of the USA from a representative democratic constitutional republic to an oligarchy/plutocracy. However, it was not associated with any violence and therefore, technically speaking it does not qualify as a coup d’état the accepted definition of which is that the overthrow of government must be associated with violence.

Nevertheless the Federal Reserve system helped put in place the foundation for what has become a dictatorship of the rich and powerful. But it was the assassination of John F. Kennedy which marked the actual violent overthrow of a democratically elected administration, after which government of, by and for the people was effectively ended-- if it ever existed at all. Since then, no US President has dared oppose the Regime for fear of being eliminated (read sidelined or assassinated).

I agree with noted author Jim Marrs that what we now have is a situation not appreciably different from the National Socialism [e.g. as in the Nazi creation of a corporatist economy and a virtual single-party state] of the Third Reich where instead of the powerful business interests being led by one solitary dictator, the US Presidency has become a figurehead position through which the plutocrats enact their demands in concert with the bought and paid for US Congress that is to say, the Democrats and the Republicans represent two apparent adversarial wings of the same party, both of which are controlled by the ruling Regime. It would not be incorrect to label the extant situation a kind of Fourth Reich as Jim Marrs has done in his book The Rise of the Fourth Reich, (New York, 2008).

Readers should understand that the so-called New World Order is really the world-wide control of global resources by a cadre of banking elites who utilize both overt and covert military power in the realization of their goals.

--Dr. J. P. Hubert


Dr. James Polk

Global Research
December 29, 2010

Our era is largely defined by two highly interlinked concepts: globalization and the so-called “war on terrorism.” As geopolitical-economic operatives, both concepts complement each other as significant means to specific ends; both shape important aspects of our daily lives and determine form and content of much that passes for public discourse. Particularly in Europe and in the United States, populations are kept vigilant to the “clear and present dangers” ostensibly posed by “international terrorism” through mnemonic icons of troop movements in Central Asia and/or strategically deployed bomb plots that are purportedly thwarted “just in time” by our intelligence services. As if copied from the lecture notes of Carl Schmitt, a totalitarian “enemy” has been constructed which can conveniently be called back into service at a moment’s notice should public memory begin to fade.

Globalization has proceeded by means of three distinct but clearly interwoven interpretations and representations of the world in toto: as the sociopolitical “cosmopolitan moment” [1] (to borrow a term coined by Seyla Benhabib) of the globe as the embodiment of our lifeworld; as the stage of operations for multinational corporate/financial interests; and as the battlefield on which incited conflicts are seen as requiring comprehensive, global solutions which are to be achieved through a New World Order. In its current development, the construct of a unified world is largely synonymous with the ideal world government as envisioned in the Sociocracy of French philosopher Auguste Comte in the 19th century [2], in which international bankers and elitest think tanks determine and execute public policies.

Implied in this global ideal is of course the complete dissolution of the nationstate as such through the gradual but de facto irreversible integration of individual nations into the totalitarian framework of the political, economic, and chief judicial/juridical entities operating on a global scale (most significantly the United Nations, the International Monetary Fund, the World Bank, the Bank for International Settlements, and the World Trade Organization).

The philosophical roots of this integrative process can be found in the determinant factors that led to the Treaty of Westphalia, which ended Europe’s horrendously brutal Thirty Years War. The treaty also buried the eius regio, quius religio principle and reinstated the tolerance of Protestants as spelled out in the Peace of Augsburg (1555), the revocation of which under the Holy Roman Emperor Ferdinand II in the Edict of Restitution (1629) prompted the vicious counter-response from Protestant nobility in Austria and Bohemia. The terms of the peace accord also radically limited the territory and power of the Holy Roman Empire and acknowledged the sovereignty of the many principalities that constituted the realm of German influence, with France and Sweden entrusted as guardians of the peace.

But the Treaty of Westphalia was of major importance for one other significant reason. The councils of minds at Münster and Osnabrück were able to establish through rational discourse the concept of a peace accord based on the primacy of reason and rules of law that transcended warring national interests and belief systems, effecting in a truly Kantian sense the regulative idea of attainable peace as a principle of reason to guide all actions of the parties involved, and to which all participants, nolens volens, were to submit. This is clearly evident in the way various clauses in the treaty assumed a meta-normative role. The treaty thus paved the way for an era of secularized thought in which the rule of law and political negotiation served as instruments of conflict resolution and as guidelines of national sovereignty based on principles of reason.

Parallel to the development of international principles of cosmopolitan conduct in our own time such as those found in the Universal Declaration of Human Rights and in the statutes of the Geneva Convention, economic and financial interests have exploited both the judicial codices formulated in international agreements and the juridical measures that now in many cases supersede pre-existing national laws through increasingly totalitarian bodies such as the World Trade Organization. [3] It is the power embodied in the domains of concentrated financial interests that today are in the process of transforming our lifeworld and realms of experience in previously unimaginable ways.

Coup d’état

Silently, and carefully hidden from public scrutiny, a coup d’état occurred in 1913 in the United States of America. The results of this bloodless coup are being felt today on a truly global scale. With careful, detailed planning, representatives of the most powerful financial institutions in both Europe and the United States succeeded through the enactment of the Federal Reserve Act (also known as the Glass-Owen bill) in radically and permanently altering the foundations of the nation as a whole.

Through the creation of the Federal Reserve system, the financial interests that conceived, wrote, and implemented the Glass-Owen bill took away the authority of the United States government as theoretical representative of the citizens of the country to print our own currency and placed that authority in the hands of a private banking cartel. According to Article 1, Section 8 of the American Constitution, it is Congress to whom the power is given “to coin money” and to “regulate the value thereof.” The Federal Reserve Act of course interprets this power quite literally as the coinage of pennies, nickels, dimes and quarters; it is, however, the creation of money in the form of bank notes that lies at the heart of the act. When the government requires money, the United States treasury writes out IOUs in the form of U.S. treasury bonds, which it then sells to the privately owned Federal Reserve system in exchange for a Federal Reserve check. In reality, the “Federal” Reserve bank simply enters the corresponding numbers on its computer keyboard, once as a liability, and once as an asset. In other words, the numbers are created by the Federal Reserve out of nothing, for which it then demands repayment with interest. The funds are then credited to the government’s account, from which all the various bills are then paid. It is in that exact moment that “money” as such is created by the Federal Reserve bank out of nothing. But there is one additional trick used by all banks operating on the Federal Reserve system: fractional reserve lending. This scheme allows the bank to multiply the amount of money it lends to clients tenfold without having the actual funds in reserve to back it up. This entire scheme has allowed the hidden owners of the private “Federal” Reserve system to effectively extort money from the American people in the form of IOUs, also known as treasuries, which then must be repaid with interest.

The legal anchoring of this scandalous system in the Glass-Owen bill in the United States was only the beginning. Like other central bank signatories to the Bretton-Woods Agreement (and thereby to the World Bank and International Monetary Fund), the US Federal Reserve system is able to control the amount of money in circulation through several mechanisms, for example by raising or lowering interest rates and/or the minimum reserve requirements of banks in the fractional reserve lending system. Through the enactment of the Federal Reserve system, the essence of money has become debt. Through the creation of debt, money comes into existence in the system. It thus becomes obvious that it is never in the bank’s interest that clients, borrowers, actually pay off their debts because that would leave the banks without interest payments. When the borrowers happen to be sovereign nations, for example from the developing world, or now the United States and a number of countries in Western Europe, the interest payments earned by the banks easily go into the hundreds of billions. This is extraordinarily profitable for banks who have been able to “sit in on” the negotiation of peace accords (through which terms of surrender and repayment of damages are settled) and international trade agreement deliberations to regulate global commerce and finance.

World War I and its outcome provide a very enlightening example of just how this has been accomplished. The terms forced on Germany through Article 231 of the Treaty of Versailles laid the foundations for the consolidation of the enormously powerful financial interests in London, New York, Frankfurt, and Paris, which had been instrumental in pushing through, by hook and by crook, the Federal Reserve Act in the United States. (It should be noted that these are the same financial interests which also did their part to push the nations into military conflict in the first place. The focus here however remains restricted to the genesis and perpetration of the private central banking cartel as such and its connections to the current financial crisis and the war on terrorism.)

The horror of World War I quickly led to the realization that the global community of nations should not allow a recurrence of such cruelty, and that universally recognized and accepted principles of conduct were needed to guarantee international peace and harmony. Such principles of good will, intentionally redolent of the terms set out by the Peace of Westphalia, could only be implemented through a common general will or global consent. In other words, a League of Nations, a Völkerbund in the strictest Kantian sense, was needed to define and implement internationally valid principles of humanitarian, indeed cosmopolitan conduct to benefit the entire human species and our lifeworld.

It was this positive impulse among other things that led the participants in the “war to end all wars” to found the “Covenant of the League of Nations.” The agreement encompassed 26 principles to which the 58 member states committed themselves. But the most central problem confounding the ideals of the League was the fact that the agreement was predicated on significant economic interests that essentially doomed the treaty to failure from the start. The League was based on the status quo as defined by the victors of World War I, who, as simultaneous representatives of ostensibly “national interests” did everything in their power to ensure the richest gains possible for the elite bankers working behind the scenes in New York, London, Paris, and Frankfurt. And the means to this end were found in the terms of reparation payments they then forced on Germany. An article featured in the May 31, 1922 issue of the New York Times outlined the most salient demands being made on Germany by the Allied entente powers:

“The Reparation Commission called on Germany to consent to the following undertakings before May 31:

1. Reduce expenditures and balance the budget.

2. Halt the increase of the foreign debt and the growth of paper money in circulation.

3. Accept a light supervision of her efforts in that direction.

4. Take measures to prevent the further flight of capital and to get back $2,000,000,000 spirited out of the country in the last two years.

5. Assure the Reichbank’s autonomy from politics.

6. Resume publication of Government fiscal statistics.” [4]

Attentive readers will immediately note the unmistakable parallels to the demands (“austerity measures”) frequently imposed on developing nations through the international monetary fund in its policy proposals formerly known as “structural adjustment programs,” including demands for the privatization of the banking system, or to use the phrase introduced by “Fed speak,” to guarantee the banks’ independence (“autonomy”) from politics. (In corrected translation, this is the simple demand that this private banking cartel as the sole source of phony money should be allowed to perpetrate its debt-based currency scam without any supervision or control by the people or their representatives.) A gamut of conditions imposed by the IMF has consistently led to widespread domestic hardship and economic crises within the nations in question, because the interests and well-being of the general population are often clearly at odds with the IMF programs being implemented. Joseph Stiglitz put it this way:

“The IMF is pursuing not just the objectives set out in its original mandate, of enhancing global stability and insuring that there are funds for countries facing a threat of recession to pursue expansionary policies. It is also pursuing the interests of the financial community. This means the IMF has objectives that are often in conflict with each other.

The tension is all the greater because this conflict can’t be brought out into the open: if the new role of the IMF were publicly acknowledged, support for that institution might weaken, and those who have succeeded in changing the mandate almost surely knew this. Thus the new mandate had to be clothed in ways that seemed at least superficially consistent with the old.” [5]

And it is precisely this extraordinary expansion of the power of the private bank cartels that was central to much of the behind-the-scenes maneuvering during and after World War I. In a very enlightening essay published in Foreign Affairs in 1936, Leon Fraser brought the true hidden agenda of the banking elite into selective public view:

“The truth was that the experts [i.e., of the second Young Commission - jp] seized the occasion of the new reparation adjustment as an excuse to repair a long recognized gap in the international financial fabric. The organization which they proposed had functions not connected with reparations, and these ostensibly secondary functions were, in the inner consciousness of the originators, the predominating motives for its establishment. By some of the members -- in particular those connected with commercial banking -- the institution was envisaged as an instrument for opening up new fields of world trade by means of fresh extensions of credit […] While there was no unanimity about the opportuneness of creating more credit, all experts agreed that the Bank could fill one obvious hiatus in the financial organization of the world, namely provide a center for central bank collaboration and for corporation to improve the international monetary mechanism.” [6]

The bank Fraser was referring to, of course, is none other than the central bank of all central banks, the Bank for International Settlements, with headquarters in Basel.

Louis McFadden, former banker-turned-congressman from Pennsylvania, condemned the hidden motives and operational methods of the Versailles Treaty in no uncertain terms. McFadden took particular aim at the Bank for International Settlements, which took charge of the gold Germany was required to deliver in reparations payments. Writing with reference to Grotius’s theory of just settlements of military conflicts (De Jure Belli ac Pacis), McFadden argued that the Versailles Treaty had in fact been negotiated in bad faith, with the “House of Morgan” and the usual suspects from the clique of international bankers being the prime beneficiaries of the reparations bonds, and that substantial aspects of the treaty had been worked out in the financial centers of London well in advance of the actual negotiations in Paris. McFadden prophetically augured the long-term consequences of the treaty as laying the “foundation for the renewal of a dozen wars that are legally justifiable.” [7]

The consolidation of economic and financial power in the West at the end of World War II made possible the ensuing rapid and encompassing globalization of inchoate trends already visible in the League of Nations platform. The establishment of the United Nations in 1945 as well as the foundation of the World Bank and the International Monetary Fund as stipulated by the outcome of the Bretton-Woods Agreement (1944), contributed substantially to the international system of currency and finance of a distinctively Anglo-American character. This meant in particular that the central banks of all member nations were largely to adopt the modus operandi of the Federal Reserve system. The printing of national currencies, once the privilege of sovereign governments, was to be replaced by the system of government bonds or IOU issuance, which would then be lent or sold to the private banking cartel (spearheaded by the country’s respective “central-bank”) in exchange for currency notes -- with interest due. The outcomes of two world wars, in which a private banking cartel had ultimately written the terms of economic and financial surrender, had forced the vanquished into participant roles in the greatest scam in human history: the creation of money out of thin air through debt, with interest payments in permanent flow to the elite sphere of private bankers -- all on a global scale.

Many of the newest investment vehicles and resources discussed in growing numbers of studies have so successfully interlocked the political realm with the corporate/financial that a clear separation is no longer possible. Nevertheless, among wide segments of the populations in many countries, voting citizens are still convinced of the sanctity of the elected office. Such convictions are based on false advertising, and the voters have failed to see the fusion between capital and the successful campaign/office tenure regularly performed behind the smoke and mirrors screens of the mass media. In a number of important instances, even opposition/protest movements have been bought and staged. [8] Yes we can! Si, se puede! should now be seen as the pitiful chants of all those who fell for the change they believed in. Change came in the form of continued bailouts for Wall Street banks, with the former head of the New York Federal Reserve placed comfortably by Obama himself on the throne of the US treasury, immune from critique and reprimand, despite his urgent e-mails to the legal counsel of AIG urging silence in response to congressional queries on the extent of the Fed’s bailout funds funneled into the pockets of Goldman Sachs. (Of course at the time these revelations became public (on the Internet!), the mainstream media was busy convincing the semi-conscious public of the importance of the then-and-now whereabouts of Tiger Woods’s genitalia.) It’s been all business as usual. But the teary-eyed and desperate seem to fall for the Hollywood hype every time: He’s the ONE!

The schematic procedures carried out by the IMF, the World Bank, and the WTO often acquire an outright absurd character. Such was the case in the often-cited structural adjustment program developed for Bolivia in the Enhanced Structural Adjustment Facility (ESAF) Policy Framework Paper for 1998 - 2001. In exchange for much-needed IMF loans, Bolivia was required to transfer the “rights” of the Cochabamba water system to the private firm of Aquas de Tunari, a subsidiary of the International Water Ltd. / Bechtel Corporation consortium. (Bechtel gained international notoriety unter the George W. Bush administration as the recipient of generous no-bid military “reconstruction” contracts in Iraq.) The privatization of the water supply meant that prices for this necessity of life increased by more than 300%, becoming unattainable for many families. With public outrage and potential violence on the horizon, a report authored by World Bank experts advised: no public subsidies should be given to ameliorate the increase in water tariffs in Cochabamba. [9]

Recent machinations by the World Trade Organization have also led to precarious globalization strategies. According to Greg Palast, an internal report sent to his office at The Guardian revealed actual threats directed at the leftist government of Brazil if the country continued to refuse to sign the Financial Services Agreement of 1999. This agreement formed the international legal basis for the deregulation of so-called “financial products,” specifically derivatives such as “credit default swaps” and “mortgage backed securities,” which then led to the global financial meltdown.

The pattern of crisis followed by a ready-made plan for a global solution has been persistent since the early 1800s, when European banking elites pulled out all the stops in order to establish a central bank on American soil. These were the same structural interests which eventually led to the passage of the Glass-Owen bill. And it is within this pattern that the origins of the current financial crisis are also to be found, specifically within the highest echelons of the Federal Reserve system.

Subsequent to the September 11 2001 attacks on New York and Washington, D.C., the Federal Reserve was “forced” to lower interest rates to a minimum in order to avoid a potential collapse of a number of important services and industries. This move enabled the decision by all branch banks nationwide to make credit easily available, particularly for home mortgages. Two years later, the entire country was in a house-buying frenzy with visions of homes increasing in value year after year until the end of time. Many buyers bought two or three in the hope of “flipping” them into untold thousands in profit.

The foundations were laid for the initialization of a previously unknown financial instrument -- BISTRO (Broad Index Secured Trust Offering) -- developed in the think tanks of J P Morgan. At the speed of electronic funds transfers, BISTRO enabled unimaginable exponential profits through “credit default swaps” which the “House of Morgan” then divided up into packages and sold by the thousands to interested parties among corporations, banks, insurance giants, and investment funds worldwide. As the German magazine Der Spiegel so accurately put it, “bank managers and central bankers were the capitans of this ship, among them superstars such as J P Morgan manager Blythe Masters and former Federal Reserve chairman Alan Greenspan.” [10]

Attentive observers of financial history should recognize the concrete developmental pattern at work here. A putatively well-founded expansion of credit and a corresponding economic boom are followed by a sudden retraction of credit and an implosion of the markets. At the core of our current crisis is the banking industry and its ability to create money and derivatives out of thin air. The collapse was predictable, and in all likelihood carefully planned. No sooner had the collapse of 2008 begun than the directors of America’s leading banks began to issue ultimatums to the American people through their own representative, Henry Paulson (former CEO of Goldman Sachs), as the Secretary of the Treasury. If bank coffers were not replenished with ample public funds, Americans would soon wake up to martial law on the streets of many major cities.

And promptly, the see-no-evil representatives in Washington came to the rescue of the global financial elite, all at the expense of tax payers, and ultimately also at the expense of national sovereignty. Concomitant demands for “global solutions” to this admittedly global problem were promptly put on the national and international agenda by the G20 and by leading economists such as Kenneth Rogoff. The U.S. Congress recently ratified a comprehensive overhaul of the nation’s financial system, and thereby granted increased authority to the Federal Reserve. On a global scale, financial and economic experts from around the world are in the process of developing fundamental revisions to the Basel Accord (Basel III) within the framework of the Bank for International Settlements. [11]

At the same time, the Federal Reserve’s late-2010 announcement that it would initiate a second round of “quantitative easing” in its efforts to free up credit and relieve financial institutions of moribund assets led to more vociferous calls for a new global reserve currency to replace the ailing dollar. The Federal Reserve’s decision to increase liquidity by printing more dollars is already seen as a potentially fatal mistake by many skeptics particularly in China, which holds an inordinately large sum of US dollars in its reserve currency trove. Russia and China, among others, have already agreed to a bilateral exchange of goods and services by using their own currencies, without the US dollar as intermediary.

Unavoidable inflationary pressures guarantee that the days of the US dollar as the world’s reserve currency are numbered; this outcome does not bode well for the people of the United States, who very likely will see martial law if and when prices for daily necessities such as gasoline skyrocket beyond what is affordable. As the chief operative for all the clandestine forces intent on seeing a one-world government in control of the planet, the Federal Reserve has been actively destroying the US currency as an instrument of national sovereignty. And in close collaboration with the “Fed,” working groups within both the United Nations and the IMF have published key position papers in which a new global currency is proposed, to be printed or coined expectedly by a global central bank. [12]

The global “war on terror”

Accompanying the increased authority of global instruments such as the IMF, the WTO and the Bank for International Settlements, an international surveillance network is fully in the making with far-reaching consequences for individual life and liberty. At particular risk today is the integrity of the Internet as the last bastion of uncensored information exchange. With every publicized “cyber attack,“ whether a reality or an ad hoc creation, new demands go out for increased security measures and legislation to control both form and content online. New key supranational concepts such as “Al Qaeda,” “terrorist networks” or “suspicious money transfers” are now in common use in public discourse and enable the implementation of unprecedented military/political control measures and surveillance strategies over ordinary citizens. The readiness of governments worldwide to adopt anti-terror measures that are potentially inimical to all forms of individual freedom is predicated on the questionable acceptance of the official explanation offered by the US government and its intelligence services for the events that transpired on 9/11. The paucity of critique, particularly among mainstream US media, of the implausible official narrative of all that transpired on 9/11 is itself sufficient evidence of a thoroughly top=down controlled American press.

The analyses of David Ray Griffin and Steven Jones (among many others) [13] of multiple inconsistencies and sheer impossibilities in the official explanation of the 9/11 attacks provide clear evidence that there were and are far more sinister plots at work than what the American public is ready to believe. Answers to the inevitable cui bono? question point to the long-term beneficiaries of global control which will ultimately allow for no exceptions.

The pattern is always the same. Present a crisis of epoch proportions, and offer solutions on a global scale which ultimately consolidate the interests of a New World Order, one as envisioned by Auguste Comte, with bankers and a select intellectual elite in complete control. The Federal Reserve system should be seen for what it is - the agency of an international clique of banking elites who are hell-bent on obtaining a global government, with a single system of universal justice, a single currency, and an all-encompassing surveillance network as guarantors of a fail-proof, totalitarian, neo-feudalistic regime. Thanks to the efforts of this same global elite, the United States is in its last throes and will eventually succumb to the constraints its leaders have willingly adopted within the context of globalization.

As admirable as perpetual peace might be under a system of benevolent reason, with the sanctity of all terrestrial life on earth foremost in mind, the concrete historical track record of those most actively engaged in bringing the ideals of this New World Order into full fruition suffices completely as a reason to reject their goals.

Elite bankers in the United States and Europe conceived and enacted the Federal Reserve system as a major stepping stone toward eventual global governance of a neo-feudalistic society. The continuing global economic crisis was also conceived and implemented as a further essential tool in bringing about a one-world government controlled by bankers and their intellectual shills sitting in crucial positions and calling the shots -- qui custodiet custodes?

The “Fed’s” covert policies and clandestine machinations are accelerating the “need” and “demand” for a global currency to replace existing national currencies. In previous eras, the implementation of such plans and intentions would have been deemed high treason and appropriately punished; in today’s parlance, it should most properly be categorized as an act of terrorism.

--Deeply influenced by both the Frankfurt School of Critical Theory and twentieth-century phenomenology, James Polk pursued his graduate studies in philosophy at the Freie Universität Berlin, where he received his PhD for work on Kant and Heidegger. He is the author of Am Horizont der Zeit and The Triumph of Ignorance and Bliss - Pathologies of Public America.

Notes:

1) Benhabib’s understanding of cosmopolitanism and its implications for human societies is presented in Another Cosmopolitanism (Berkeley Tanner Lectures), Robert Post, ed. (Oxford: Oxford University Press, 2008) and in The Rights of Others: Aliens, Residents, and Citizens (The Seeley Lectures), (Cambridge: Cambridge University Press, 2004).

2) Auguste Comte, System of Positive Polity, transl. Richard Congreve, (London: Longmans, Green, and Co., 1877).

3) See in particular Michel Chossudovsky, “The Global Economic Crisis: An Overview,” The Global Economic Crisis. The Great Depression of the XXI Century, ed. Michel Chossudovsky and Andrew Gavin Marshall, (Montreal: Global Research Publishers, 2010) 3 - 60.

4) Edwin L. James, “Reparations Issue Now Up To Bankers,” New York Times, 31 May 1922.

5) Joseph E. Stiglitz, Globalization and Its Discontents (New York: W. W. Norton, 2002) 206 - 207.

6) Leon Fraser, “The International Bank and Its Future,” Foreign Affairs (New York: Council on Foreign Relations) vol. 14, number 3 (April, 1936), p. 454.

7) Louis T. McFadden, “The Reparations Problem and the Bank for International Settlements,” Annals of the American Academy of Political and Social Science, vol. 150, Economics of World Peace (July, 1930), p. 53 - 64.

8) Michel Chossudovsky, “Manufacturing Dissent: the Anti-globalization Movement is Funded by the Corporate Elites. The People’s Movement has been Hijacked,” Center for Global Research, September 20, 2010, http://www.globalresearch.ca

9) IMF Bolivia Public Expenditure Review. www.wds.worldbank.org

10) The original Spiegel text: “Bankmanager und Zentralbanker waren auf diesem Schiff die Kapitäne, darunter Superstars wie die JP Morgan-Managerin Blythe Masters und der Ex-chef der US-Notenbank, Alan Greenspan.” (translation j.p.) “Der größte Diebstahl aller Zeiten - wie Finanzjongleure die Welt in eine Krise stürzten, die noch lange nicht beendet ist,“ Der Spiegel, number 47 (November 11, 2008) p. 47.

11) See Ellen Brown, “The Towers of Basel: Secretive Plan to Create a Global Central Bank,” The Global Economic Crisis. The Great Depression of the XXI Century, ed. Michel Chossudovsky and Andrew Gavin Marshall, (Montreal: Global Research Publishers, 2010) 330 - 342.

12) See in particular the International Monetary Fund paper entitled “Reserve Accumulation and International Monetary Stability” prepared by the Strategy, Policy and Review Department (April 13, 2010) and the United Nations’ “Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System” (September 21, 2009).

13) See especially David Ray Griffin, Debunking 9/11 Debunking: An Answer to Popular Mechanics and Other Defenders of the Official Conspiracy Theory (Northampton, Mass.: Olive Branch Press, 2007); idem., The 9/11 Commission Report: Omissions and Distortions (Northampton, Mass.: Olive Branch Press, 2004); Niels H. Harrit, Jeffrey Farrer, Steven E. Jones et al., “Active Thermite Material Discovered in Dust from the 9/11 World Trade Center Catastrophe,” The Open Chemical Physics Journal, 2009, 2, 7-31.

The Emperor Has no Clothes: America is Close to Bankrupt

U.S. Is Bankrupt and We Don't Even Know

By Laurence Kotlikoff

August 11, 2010 "Bloomberg" -- Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.

Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”

But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”

The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.

Double Our Taxes

To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.

Such a tax hike would leave the U.S. running a surplus equal to 5 percent of GDP this year, rather than a 9 percent deficit. So the IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled. It’s also saying the longer the country waits to make tough fiscal adjustments, the more painful they will be.

Is the IMF bonkers?

No. It has done its homework. So has the Congressional Budget Office whose Long-Term Budget Outlook, released in June, shows an even larger problem.

‘Unofficial’ Liabilities

Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.

For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.

The fiscal gap isn’t affected by fiscal labeling. It’s the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.

$4 Trillion Bill

How can the fiscal gap be so enormous? Simple. We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.

This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.

Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.

And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

Worse Than Greece

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.

Some doctrinaire Keynesian economists would say any stimulus over the next few years won’t affect our ability to deal with deficits in the long run.

This is wrong as a simple matter of arithmetic. The fiscal gap is the government’s credit-card bill and each year’s 14 percent of GDP is the interest on that bill. If it doesn’t pay this year’s interest, it will be added to the balance.

Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue.

My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”

Laurence J. Kotlikoff is a professor of economics at Boston University and author of “Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking.” The opinions expressed are his own.)

To contact the writer of this column: Laurence Kotlikoff at kotlikoff@bu.edu

____________

Reagan insider: 'GOP destroyed U.S. economy'

Paul B. Farrell
MarketWatch
Aug. 10, 2010

ARROYO GRANDE, Calif. (MarketWatch) -- "How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman's message? It's already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.

Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for destroying the U.S. economy. Listen closely:

Reagan Republican: the GOP should file for bankruptcy

Stockman rushes into the ring swinging like a boxer: "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "Republicans used to believe that prosperity depended upon the regular balancing of accounts -- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too."

No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.

Stockman's indictment warns that the Republican party's "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge

Richard Nixon's gold policies get Stockman's first assault, for defaulting "on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America's been living "beyond our means as a nation" on "borrowed prosperity on an epic scale ... an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves."

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions. And unfortunately "once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors."

And without discipline America was also encouraging "global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve." Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist's advice.

Stage 2. Crushing debts from domestic excesses, war mongering

Stockman says "the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40% of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970." Who's to blame? Not big-spending Dems, says Stockman, but "from the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."

Back "in 1981, traditional Republicans supported tax cuts," but Stockman makes clear, they had to be "matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration's hastily prepared fiscal blueprint, however, was no match for the primordial forces -- the welfare state and the warfare state -- that drive the federal spending machine."

OK, stop a minute. As you absorb Stockman's indictment of how his Republican party has "destroyed the U.S. economy," you're probably asking yourself why anyone should believe a traitor to the Reagan legacy. I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it's having huge negative consequences.

Yes, the GOP does have a welfare-warfare state: Stockman says "the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending, exempted from the knife most of the domestic budget -- entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans' fiscal religion."

When Fed chief Paul Volcker "crushed inflation" in the '80s we got a "solid economic rebound." But then "the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts." By 2009, they "reduced federal revenues to 15% of gross domestic product," lowest since the 1940s. Still today they're irrationally demanding an extension of those "unaffordable Bush tax cuts [that] would amount to a bankruptcy filing."

Recently Bush made matters far worse by "rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures." Bush also gave in "on domestic spending cuts, signing into law $420 billion in nondefense appropriations, a 65% percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy." Takes two to tango.

Stage 3. Wall Street's deadly 'vast, unproductive expansion'

Stockman continues pounding away: "The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector." He warns that "Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation." Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street's too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming "American Apocalypse."

Stockman refers to Wall Street's surviving banks as "wards of the state." Wrong, the opposite is true. Wall Street now controls Washington, and its "unproductive" trading is "extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and "virtually free money from the Fed's discount window to cover their bad bets."

Stage 4. New American Revolution class-warfare coming soon

Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore," while at home "high-value jobs in goods production ... trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million."

As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans -- paid mainly from the Wall Street casino -- received two-thirds of the gain in national income, while the bottom 90% -- mainly dependent on Main Street's shrinking economy -- got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."

Get it? The decaying fruit of the GOP's bad economic policies is destroying our economy.

Warning: this black swan won't be pretty, will shock, soon
His bottom line: "The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing ... it's a pity that the modern Republican party offers the American people an irrelevant platform of recycled Keynesianism when the old approach -- balanced budgets, sound money and financial discipline -- is needed more than ever."

Wrong: There are far bigger things to "pity."

First, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it's just another TV reality show.

Second, that, unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind.

And third, there's a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle ... until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long Great Depression II and a historic class war.

So be prepared, it will hit soon, when you least expect.

A Warning From Noam Chomsky on the Threat of Elites

By Fred Branfman

It was not by making yourself heard but by staying sane that you carried on the human heritage. ... [Doublethink is] to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both, to repudiate morality while laying claim to it. ... [Continuous] war involves very small numbers of people, mostly highly trained specialists. … The fighting … takes place on the vague frontiers whose whereabouts the average man can only guess at. … —George Orwell, “1984”

[The treatment of the] hapless race of native Americans, which we are exterminating with such merciless and perfidious cruelty, [is] among the heinous sins of this nation, for which I believe God will one day bring [it] to judgment. --- John Quincy Adams, cited in Noam Chomsky’s new book, “Hopes and Prospects”


June 08, 2010 "Truthdig" -- Noam Chomsky’s description of the dangers posed by U.S. elites’ “Imperial Mentality” was recently given a boost in credibility by a surprising source—Bill Clinton. As America’s economy, foreign policy and politics continue to unravel, it is clear that this mentality and the system it has created will produce an increasing number of victims in the years to come. Clinton startlingly testified to that effect on March 10 to the Senate Foreign Relations Committee:

"Since 1981 the United States has followed a policy until the last year or so, when we started rethinking it, that we rich countries that produce a lot of food should sell it to poor countries and relieve them of the burden of producing their own food so thank goodness they can lead directly into the industrial era. It has not worked. It may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake. It was a mistake that I was a party to. I am not pointing the finger at anybody. I did that. I have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people, because of what I did, nobody else."

Clinton is to be praised for being the first U.S. president to take personal responsibility for impoverishing an entire nation rather than ignoring his misdeeds or falsely blaming local U.S.-imposed regimes. But his confession also means that his embrace of the International Monetary Fund, the World Bank, the World Trade Organization and NAFTA “neo-liberalization” destroyed the lives of many more millions well beyond Haiti, as U.S. support for heavily subsidized U.S. agribusiness damaged local agricultural economies throughout Latin America and beyond. This led to mass migration into urban slums and destitution, as well as increased emigration to the U.S.—which then led Clinton to militarize the border in 1994—and thus accelerated the “illegal immigration” issue that so poisons U.S. politics today.

Clinton might also have added that he and other U.S. leaders imposed such policies by force, installing military dictators and vicious police and paramilitary forces. Chomsky reports in “Hopes and Prospects” that in Haiti, semiofficial thugs empowered by a U.S.-supported coup murdered 8,000 people and raped 35,000 women in 2004 and 2005 alone, while a tiny local elite reaps most of the benefits from U.S. policies.

Clinton’s testimony reminded me of one of my visits with Chomsky, back in 1988, when, after talking for an hour or so, he smiled and said he had to stop to get back to writing about the children of Haiti.

I was struck both by his concern for forgotten Haitians and because his comment so recalled my experience with him in 1970 as he spent a week researching U.S. war-making in Laos. I had taken dozens of journalists, peace activists, diplomats, experts and others out to camps of refugees who had fled U.S. saturation bombing. Chomsky was one of only two who wept openly upon learning how these innocent villagers had seen their beloved grandmothers burned alive, their children slowly suffocated, their spouses cut to ribbons, during five years of merciless, pitiless and illegal U.S. bombing for which U.S. leaders would have been executed had international law protecting civilians in wartime been applied to their actions. It was obvious that he was above all driven by a deep feeling for the world’s victims, those he calls the “unpeople” in his new book. No U.S. policymakers I knew in Laos, nor the many I have met since, have shared such concerns.

Bill Clinton’s testimony also reminded me of the accuracy of Chomsky writings on Haiti—before, during and after Clinton’s reign—as summed up in “Hopes and Prospects”:

The Clinton doctrine, presented to Congress, was that the US is entitled to resort to “unilateral use of military power” to ensure “uninhibited access to key markets, energy supplies and strategic resources.” In Haiti, Clinton [imposed] harsh neoliberal rules that were guaranteed to crush what remained of the economy, as they did.

Clinton would have a cleaner conscience today had he listened to Chomsky then. Many more Americans may also benefit by heeding Chomsky today, as U.S. elites’ callousness toward unpeople abroad is now affecting increasing numbers of their fellow citizens back home. Nothing symbolizes this more than investment bankers tricking countless Americans out of their life savings by luring them into buying homes they could not afford that were then foreclosed on.

In doing so, Wall Streeters exhibited what Chomsky describes as a Western elite imperial mentality, dating back to 1491 (his first chapter is entitled “Year 514: Globalization for Whom?”). Only this time instead of impoverishing Haitians or Chileans, it was Americans who were afflicted by a “system” of “fuck the poor” (in the words of successful Wall Street trader Steve Eisman). [See Branfman’s review of “The Big Short” in Truthdig.]

The many Americans whose lives have been damaged by financiers’ single-minded focus on short-term profits at the expense of everyone else are only a harbinger of what is to come. Financial elites remain in charge, as evidenced by recent “financial reform” legislation that does not even reinstate the Glass-Steagall law separating investment and commercial banking. New York magazine has described how Obama officials blocked even inadequate reforms, let alone the stronger proposals from Nouriel Roubini, one of the few major economists to foresee the economic crash. Former International Monetary Fund chief economist Simon Johnson tells us “our banking structure remains—and the incentive and belief system that lies behind reckless risk-taking has only become more dangerous,” thus setting the stage for an even worse crash than that of 2008. And, as U.S. competitiveness continues to decline and it cannot afford its endless wars without drastically cutting social spending, countless more Americans will find themselves paying the price for U.S. elites’ imperial mentality.

This mentality described by Chomsky includes the following elements: (1) a single-minded focus on maximizing short-term elite economic and military interests; (2) a refusal to let other societies follow their own paths if perceived to conflict with these interests; (3) continual and massive violations of international law; (4) indifference to human life, particularly in the Third World; (5) massive violation of the U.S. Constitution, especially through the executive branch’s seizure of the power to wage unilateral and unaccountable war in every corner of the globe; (6) indifference to U.S. and international public opinion, which is often more progressive and humane than that of the elites; (7) a remarkable ability to “manufacture consent,” aided by the mass media and intellectuals, that has blinded most Americans to the truth of what their leaders actually do in their names.

To pick but one example of the dozens Chomsky provides: U.S. elite opinion unanimously celebrated the 1990 Nicaraguan election defeating the Sandinistas as a “victory for fair play,” to quote a March 10 New York Times Op-Ed article. But Chomsky reminds us of Time Magazine’s March 12 report on just what this “fair play” meant:

In Nicaragua, Washington stumbled on an arm’s-length policy: wreck the economy and prosecute a long and deadly proxy war until the exhausted natives overthrow the unwanted government themselves. The past ten years have savaged the country’s civilians, not its comandantes. The impoverishment of the people of Nicaragua was a harrowing way to give the National Opposition Union (U.N.O.) a winning issue.

Wrecking a Third World country’s economy and savaging its civilians are such standard U.S. elite behavior that it is barely noticed, let alone criticized in the mass media or halls of Congress. Perhaps the most dramatic example of America’s imperial mentality, however, is the answer to the following question: Which nation’s leaders since 1945 have murdered, maimed, made homeless, tortured, assassinated and impoverished the largest number of civilians who were not its own citizens?

I have asked this question of Americans in every walk of life since I discovered the bombing of Laos in 1969. It’s a simple matter of fact, not involving judgments of right and wrong, and I remain astonished at how most answer “the Russians,” “the Chinese,” or just have no idea that their leaders have killed more noncitizen civilians than the rest of the world’s leaders combined since 1945.

The bodies of Indochinese and Iraqi civilians for which U.S. leaders bear responsibility would, if laid end to end, stretch from New York to California. These would include the huge proportion of civilians among the 3.4 million Vietnamese that Robert McNamara estimated were killed in Vietnam (over 90 percent by U.S. firepower), Laotian and Cambodian civilians felled by the largest per capita and most indiscriminate bombing of civilian targets in history, the 1 million to 1.5 million Iraqis estimated by the U.N.‘s Denis Halliday to have died from Clinton’s sanctions “designed,” in Halliday’s words, “to kill civilians, particularly children,” and the hundreds of thousands killed as a result of the Bush invasion. The total number of civilians killed, wounded, made homeless and impoverished by U.S. leaders or local regimes owing their power to U.S. guns and aid—in not only Indochina and Iraq but Mexico, El Salvador, Israel/Palestine, the Dominican Republic, Panama, Nicaragua, Guatemala, Egypt, Iran, South Africa, Chile, East Timor, Haiti, Argentina, Ecuador, Brazil, Bolivia, Venezuela, Cuba, Jamaica, the Philippines and Indonesia—is in the tens of millions.

One can debate whether U.S. military action against Vietnamese communists, Nicaraguan Sandinistas, Saddam Hussein or the Taliban were or are warranted. But there can be no possible justification for waging war that winds up killing and impoverishing much of the civilian population, on whose behalf U.S. leaders claim to fight, in violation of the laws of war and elemental human decency. Nor can anyone who truly believes in democracy support allowing a handful of U.S. leaders to savage civilians abroad without even informing, let alone seeking permission of, Congress and the American people.

The incredible fact that U.S. leaders could inflict such carnage without their citizenry knowing is the single most dramatic example of another of Chomsky’s major themes: “manufactured consent,” produced by (1) constant iterations of U.S leaders’ idealism and desire to promote freedom, supported by the mass media (e.g. when Washington Post columnist David Ignatius called Paul Wolfowitz Bush’s “idealist-in-chief,” even as their invasion was laying waste to Iraq), (2) massive media coverage of the misdeeds of the latest U.S. opponents, and (3) ignoring our own, often far greater, crimes.

Most Americans were fully and appropriately made aware of Taliban assassinations of their opponents, for example. But there was no public discussion of guilt, let alone punishment for those responsible, when Gen. Stanley McChrystal implicitly admitted in the summer of 2009 that the U.S. military had been killing countless Afghan civilians for the previous eight years as a result of air and artillery fire aimed at population centers. Nor are most Americans aware that McChrystal was rewarded with his present post, being in charge of the Afghanistan war, for conducting five years of assassination and torture as head of the top-secret Joint Special Operations Command in Iraq.

Chomsky is especially concerned with the Israeli-Palestinian conflict in general, and U.S.-Israel treatment of the people of Gaza in particular. He notes that Hamas is regularly attacked in the U.S. press, but there has not been comparable attention given to the U.S./Israeli decision to inflict daily collective punishment on the people of Gaza since they democratically elected Hamas in January 2006. He quotes Article 33 of the Fourth Geneva Convention of 1950, which states that “no protected person may be punished for an offence he or she had not personally committed” and reports how Israel, fully supported by U.S. leaders, continues to inflict precisely such punishment on the people of Gaza by destroying their economy, limiting their access to food and water, denying them health care, restricting their movement, and engaging in kidnapping, assassination and bombing—a program he calls “imposing massive suffering on the animals in the Gaza prison.”

Perhaps the most basic reason Americans should read Chomsky’s work today, therefore, is simply to understand the real world in which they live, that which is obscured by their leaders and the U.S. mass media. The purpose of “Newspeak” in the novel “1984” was to eliminate whole categories of thought. In our time, one such category is the fact that “U.S. leaders regularly and illegally kill enormous numbers of foreign innocent civilians.” The elimination of this thought-category in our cognitive framework understandably led President George W. Bush to explain 9/11 by saying “they hate our freedom”—a logical conclusion to someone ignorant of the trail of blood left by his predecessors. As Chomsky notes, however, “historical amnesia is a dangerous phenomenon ... because it lays the groundwork for crimes ahead” and, it should be noted, increased dangers of terrorism against Americans.

This increased threat of terrorism, which, Chomsky reports, citing the New American Foundation, has increased sevenfold because of the invasion of Iraq, is a second area in which Americans are today increasingly threatened by their leaders’ imperial mentality. As many experts noted in the wake of the Times Square bombing attempt, Barack Obama’s vast increase in drone strikes in Pakistan—and relaxing targeting rules to include “low-level fighters whose identities may not be known”—has further increased the danger of terrorist attacks in the U.S.

As the elites’ imperial mentality comes home, Americans are also increasingly threatened by climate change—produced by a system that statutorily requires elites to pursue short-term profit for their firms, even at the cost of destroying the biosphere their own children and grandchildren will depend on for life itself.

In today’s system, Chomsky explains, to “stay in the game,” CEOs must maximize their own short-term profits while treating the costs of doing so as “externalities” to be paid by the taxpayer. In the case of climate change, however, “externalities happen to be the fate of the species.” An imperial mentality which has primarily threatened the Third World in the past, in other words, has now become a threat to the survival of not only America but all civilization as we know it.

Chomsky thus argues that human survival requires changing the system, not merely periodically replacing those running it. His “Hopes and Prospects” covers President Obama’s first year in office and the many “hopes” that he has so profoundly disappointed because of a system that virtually requires “doublethink” of its leaders. Obama was undoubtedly as sincere when he spoke of “our fidelity to the rule of law and our Constitution” at West Point on May 22 as he was six months earlier when he secretly approved Gen. David Petraeus’ proposal for a “broad expansion of clandestine military activity” worldwide that “does not require the president’s approval or regular reports to Congress.”

Obama also presumably holds two contradictory opinions when, as Chomsky reports, he continues Bush policies he so recently criticized and promised to change: extending executive power to indefinitely imprison people without trial, torture (though by allied rather than U.S. torturers), indiscriminate killing (particularly by escalating in northern Pakistan, as described in Truthdig, “Unintended Consequences in Nuclear Pakistan”), and supporting Israeli policies precluding a two-state solution. Chomsky also observes that Obama could not have been elected in the first place, given his greater need for campaign funds from above than fidelity to his voters below, had he not been prepared to continue these imperial policies.

Chomsky’s explanation of the American system’s imperial mentality also illuminates a seeming mystery: How could decent people like Jimmy Carter, Bill Clinton and Barack Obama commit so much evil? Our concept of evil is shaped by such paranoid psychotics as Hitler, Stalin and Mao, who all hated their victims and openly lusted for power. We do not yet understand that in today’s American system the problem we face is not so much inhumanity from the mad and evil as “ahumanity” from the sane and decent.

U.S. leaders have nothing against those they regularly kill and impoverish. On the contrary, they often exhibit compassion for them, as when Jimmy Carter supported human rights. But they are products of a system that is indifferent to the fate of the unpeople, whether in the shah’s Iran, Somoza’s Nicaragua, Suharto’s Indonesia or the many other dictatorial regimes that enjoyed President Carter’s support.

Chomsky denies the oft-heard charge that he is “anti-American,” noting his criticism of the crimes of many other nations’ leaders, and saying he focuses on U.S. leaders because, as a U.S. citizen, it is the government he can most affect; because it is the government that has done more harm than any other since 1945; and because the United States’ behavior today poses so much danger to human survival. He might also add that there are so many others eager to catalog the crimes of America’s enemies, yet relatively few Americans willing to document their own leaders’ misdeeds.

At the moment, Chomsky’s proposed solutions are politically unthinkable. As the American economy and polity continues to unravel and suffering mounts at home and abroad, however, a mass movement may arise that is capable of saving America and the world. If so, such a movement is likely to attempt solutions of the sort Chomsky proposes. Here are two out of a far larger number:

State capitalism for the many: The American Enterprise Institute’s chief declared in a May 23 Washington Post Op-Ed that “America faces a new culture war,” between “free enterprise” offering “rewards determined by market forces” and “European-style statism.” “Hopes and Prospects” explains at some length, however, why this formulation is absurd. America’s “free enterprise” system has always been based on massive government aid, from the Army building 19th century railroads, to the Pentagon’s post-World War II role in building the Internet and Silicon Valley, to today’s “rewards” to Wall Street and oil companies determined not by market forces, but those companies’ political clout. America has been practicing “state capitalism” since the founding of the Republic, and will continue to do so for the foreseeable future no matter which party is in office.

The real choice, Chomsky makes clear, is not free enterprise versus statism, but state capitalism for (A) the few or (B) the many. The latter would include breaking up the banks, a focus on job creation and safety net expansion where needed, single-payer health insurance, higher taxes on the wealthy, far lower military spending, public members on corporate boards, greater employee workplace control and, above all, a new public-private partnership to see America become a leader in a clean energy economic revolution.

A Nuclear Weapons-Free Zone and Two-State Solution in the Middle East: Chomsky proposes that rather than continuing to engage in senseless fighting and confronting Iran over nuclear weapons, U.S., Israeli, Arab and Iranian interests would be far better served by the U.S. using its enormous military and economic clout to create a Mideast nuclear weapons-free zone that Iran says it is willing to accept, and a comprehensive and fair Israeli-Palestinian settlement including Hamas’ promised recognition of Israel and cessation of rocket attacks. A major benefit to the U.S. would be to reduce the threat of domestic terrorism. For only a comprehensive new policy that addresses the source of anti-U.S. hatred—U.S. war-making on civilians and support of corrupt and vicious local regimes—can reduce it.

Fifty years ago, Americans were told that the North Vietnamese communists were so evil that 55,000 Americans and millions of Vietnamese had to die, and much of Vietnam had to be destroyed, in order to keep it “free.” But for 20 years now, despite the triumph of the communists, Vietnam has been a normal trading partner of the United States and poses no threat to its neighbors. Could the Middle East also be normalized were U.S. leaders to use their enormous power to promote peace rather than war? Maybe, maybe not. But it is obvious that the risks of trying to do so are far less than the present dangers of nuclear proliferation, chaos in nuclear-armed Pakistan, Israel-Iran military confrontation and increasing support for anti-American terrorism within the 1.2 billion-strong Muslim world.

That Chomsky’s sensible proposals are not seriously discussed is a measure of the ubiquity of U.S. elites’ imperial mentality in mid-2010. Chomsky suggests that John Quincy Adams’ fear of divine retribution to America for its cruelty to Native Americans is unfounded, and that “earthly judgment is nowhere in sight.” Much of his work, however, suggests otherwise. A U.S. elite imperial mentality that once threatened mainly unpeople is today threatening America itself.

The fundamental tension throughout Chomsky’s work is between his belief that organizing and popular movements offer hope of change and the overwhelming evidence he presents of elite power precluding such change. On the one hand, he writes that “Latin America, today, is the scene of some of the most exciting developments in the endless struggle for freedom and justice” as its nations improve their citizens’ lives by extricating themselves from the neoliberal regime and elect leaders responsible to mass movements from below rather than financing from wealthy minorities above.

But on the other hand, his description of the stranglehold elites hold over both domestic and foreign policy offers little near-term hope for the kind of systemic changes he believes are needed to save the species. It is true that postwar America has not before faced the kind of economic and imperial decline that now awaits it, and this may produce possibilities for systemic change. But they are nowhere yet in sight. (Editor's emphasis throughout)

I recently sat with Chomsky, an intellectually uncompromising but personally kind, gentle and mild-mannered man, in his kitchen discussing such new U.S. elite horrors as the trend toward “1984”-like automated warfare, when it suddenly hit me.

What is it like, I found myself thinking, to know more than any other human being on Earth about the state-sponsored lies to which Americans are so constantly subjected? What is it like to so feel in your bones, hour after hour, day after day, the pain of millions of “unpeople” suffering hunger, poverty and death caused by U.S. elites who today also threaten both their own nation and all humanity? And what is it like, even though your writings are published, to have their lessons ignored by society at large, as the killing continues and U.S. war-making “on the vague frontiers whose whereabouts the average man can only guess at” has now become permanent?

“Noam,” I said, “I’ve just realized who you really represent to me. Do you remember how Winston Smith [the “1984” character] realized that his highest obligation to humanity and himself was just to try and remain sane, to somehow commit the truth to paper, and to hope against rational hope that somewhere, some time, future humans might come to understand and act on it? To me, at this point in time, you’re Winston Smith.”

I will never forget his reaction.

He just looked back at me.

And smiled sadly.